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Certainly, I'm not the fastest worker anymore at 52 years. Taking the maximum hours per mbf for our worst first salvage, it takes me about 24 hours to produce one thousand square feet of flooring.
The market value for flooring strips is about $3,000 per thousand square feet. A stumpage value of $500/mbf yields a value-added for my work of $2,500. Using commercially worthless timber increases the value-added income.
The $2,500 that I earned is half costs and half middlemen's profit (I eliminated the forester, timber buyer, sawmill business, kiln operation, millwork shop, trucking company, wholesaler�.) The $1,250 in costs breaks down to $625 in fixed costs & expenses and $625 in wages. Fixed costs includes; land, buildings, equipment, insurance, etc. Expenses are; fuel, blades, electricity, supplies, etc. I earned $26/hour - probably a little higher than the average paid by the timber industry for this work. When I add the middleman profit to my bank account, I actually do much better!
But I don't want to stop there.
Installing and finishing flooring in a customer's home takes us 40 to 80 hours per thousand square feet. Market price for installing and finishing is around $5,000 per thousand square feet. Our gross earnings from this step are $7,000 per thousand square feet as we make the retail sale also. Again, we earn the middlemen profit (retailer, flooring company, trucking�) -
totaling $3,500 or so at this step.
Fixed costs are very low for this stage, estimated at $400 per thousand square feet. I own a chop saw, table saw, air compressor, nailer, floor sander, and some hand tools. Nails, varnish, sandpaper, etc. cost $350 and travel costs average $250 per thousand square feet. Net earnings for labor are about $2,750
($3,500 minus $750) or $34 per hour. This work is much easier and safer than the logging and manufacturing process.
As the business owner, I can add the middlemen profit to my wages and total over $75/hour.
Summary:
Value-Multiplied Manufacturing at Timbergreen Farm
Dollars per thousand board feet of flooring
Activity Time Spent Value Added
Harvesting 2-5 hours $ 250/mbf
Sawmilling 3-5 hours $ 250/mbf
Kiln Drying 4 hours $ 250/mbf
Tongue & Groove Flooring 10 hours $1,500/mbf
Install Flooring 80 hours $7,000/mbf
This example assumes crediting the forest owner $500 per mbf and leaves $250/mbf for warehousing, trucking, extra handling etc. or just more profit!
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